Sonatrach lets contract for greenfield petrochemical complex

STEP Polymers SPA, a wholly owned subsidiary of Algerian state-owned Sonatrach SPA, has awarded a contract to a Petrofac Ltd.-led consortium for design and construction of a greenfield petrochemical complex in Arzew industrial zone of western Algeria’s Oran province.

As part of the $1.5-billion contract signed June 11, Petrofac and partner China Huanqiu Contracting & Engineering Corp. will provide engineering, procurement, and construction (EPC) of the complex’s integrated propane dehydrogenation (PDH) and polypropylene production (PP) units, as well as associated utilities and infrastructure at the site, Petrofac and Sonatrach said in separate releases.

Once in operation, the new PDH-PP complex will produce 550,000 tonnes/year of PP.

Scheduled for completion within 42 months, STEP Polymers’ new PDH-PP complex comes as part of Sonatrach’s transformation strategy through 2030, a pillar of which calls for expanding and optimizing Algeria’s petrochemical industry to help meet domestic demand for chemical products and create surplus production for export to markets in Europe, the Asia Pacific, and Africa, the state-owned company said.

Alongside creating about 6,000 jobs during construction and 450 jobs once operational, Sonatrach said the PDH-PP plant will incorporate the latest domestic and international standards to ensure environmental protection in line with the global energy transition, including an accompanying major program for planting of trees and vegetation coverage in the Oran provincial region.

Project financing, technology

Sonatrach separately confirmed on June 11 STEP Polymers’ signing of a financing agreement with the National Bank of Algeria (BNA), under which BNA will fund 70% of construction costs for the PDH-PP project.

The operator will finance the remaining 30% of the project through equity, Sonatrach said.

STEP Polymers, or Sonatrach Total Entreprise Polymères, was originally formed as a joint venture between Sonatrach and TotalEnergies SPA (OGJ Online, Oct. 8, 2018).

The planned complex’s PP unit will be equipped with LyondellBasell Industries Holdings BV’s proprietary Spheripol process technology for production of PP.